tv [untitled] October 4, 2012 3:30am-4:00am EDT
residential mortgage backed securities working group which is allegedly a task force that obama has tasked with actually investigating on a federal and state level these alleged mortgage fraud. and this task force max so in case you really think that jamie dimon something might happen to him or bear stearns to exparel stearns guys well lanny breuer is also on this alleged task force and lanny breuer feel the call we've just covered him recently where he was the one who spoke before the new york city bar association saying that deferred prosecution arrangements are perfect i love them they're the best way to deter banking crime. as it is. straight rat all right we've talked about her prosecution agreements in the past haven't we i mean there are where you can't make this stuff up then they're guilty but we're going to defer to the prosecution how much that cost j.p.
morgan itself in response to the civil suit said we're disappointed that the new york attorney general decided to pursue its civil action without ever offering us an opportunity to rebut the claims without developing a full record instead relying on recycled claims already made by private plaintiffs that this private plaintiff of course max is back formerly giant insurer who insured many of these c.d.o. isn't mortgage backed securities that have now blown up and we covered this two years ago two years ago well before this eric schneiderman even thought of this and we covered it with terry buell so let's go to that episode and then you've got j.p. morgan bear stearns suing and back of suing these folks for accounting fraud for acting in bad faith tells a little bit about this yes ambac didn't didn't do their homework ok when they were insuring some of these products they relied on their sterns and e.m.c. now baiji. the morgan to sell the product that the raiders said was aaa rated and
to say that the loans that they're putting in there they know are going to work out and that they're going to perform ok well am back it has now learned that bear stearns actually according to the lawsuit. knew they were putting in bad. you know for doing investigative journalism on this page two years ago expose it now finally it's coming to light but during those two years time stacy what happened is that a bank when j.p. morgan they figured out a way to securitize their potential liability and to sell it on to some teenagers market make money on their guilt they're never going to pay any sizable or meaningful penalty because they can always package their guilt as a kill back security sell to some poor bank in europe and then that will go bankrupt and they'll porus more austerity measures in greece you know j.p. morgan itself is using the fact that it was bear stearns that package these
fraudulent securities as a way for them to whitewash themselves but as terry peel mentioned in that interview two years ago and back itself in their civil suit in their private suits against j.p. morgan well they say that it was j.p. morgan itself that basically forced them to go bankrupt by refusing to pay out on the fraudulent bonds that they that had gone bust they should have no much second thing is this idea that morgan can claim that their responsibility is limited due to the fact that this was all done over at bear stearns but remember the reason why you have the global financial crisis in two thousand and seven two thousand and eight was the too big to fail concept banks were getting too big so when it congress allowed to happen as a result of that they allowed the banks to get even bigger so now j.p. morgan bought several banks including bear stearns and they're bigger than ever which means our political leverage is greater than ever which means our culpability factor goes down to the lowest level it's ever been and this is of course wall
precipitate more bank failures which will then mean that j.p. morgan will buy another bank and become even bigger. so robert peston of the b.b.c. covered this in j.p. morgan subprime horror and he says he knows that the emails note that bear stearns traders on one package of these securities noted that sixty percent of the loans were already delinquent yet they packaged it up and sold it to investors a further securitization was described as he said at the top of the show a sack of and a breather oh no they would suck endeavors and they package him up their research characterize them they put them all up in a mince them into a nice mincemeat christmas pot of cadavers which they created could never collateralized debt obligation they sell to do it your banker b.n.p. in europe then a buck goes out of business and then they impose more austerity measures so the austerity measures are direct result of this fraud and accounting fraud by j.p.
morgan the people are suffering. so we covered that last year. carl levin of the senate he was famously the famous senate hearing where they kept on having to bleep it out because it was a deal from goldman sachs that they sold to investors to remember that evidence was passed to the department of justice probably lanny breuer and he decided there was no case so if you think there's going to be any sort of case here with the same exact language the same exact apparently sat that was collateralized many times over and sold to all sorts of people but the other thing was because these mortgage bonds had just gone bust so fast all the mortgages underlying the mortgage securities they went bust so fast their originators of those loans were supposed to buy them back and bear stearns was supposed to get that money from them and then give it to the investors but what bear stearns did is they did go to the mortgage originators but they gave them a sort of sweetheart deal they negotiated
a lower price a lower fee took the money and never gave it to investors so again this is the civil suit remember it's not a criminal case here well you know this is the new cold war you know what i mean by that is remember people lived under the threat of somebody pushing develop the big button starting off a chain reaction of atomic bombs you know this is the new cold war j m a diamond of j.p. morgan if you go after them they'll push the button to crash the market this is the way things operate now so people are living in fear of this world war three which is about to explode because they've got their finger on the button to crash the market just like nucular physics led to the potential to blow up the world you've got economics and financial theory now creating the ability to blow up the financial world people in mainstream media and economists are discussing well if you keynesianism is it milton friedman ism it's like discussing you know the mechanics of an atomic bomb was being dropped on hiroshima that's not really the
point isn't the point is that is blowing up and killing people. will the point is that this financial bomb is exploding jamie diamond is the arch master enemy an evil incarnate who is killing hundreds of thousands of people suffering austerity because he's got the weapons of mass financial destruction and he's using them he's using them now well peston at the b.b.c. goes on to say quote it is noteworthy that banks in the u.s. and u.k. that are trying to clean themselves up cannot yet escape from the costs of the sins of their past the such a lame comment they can't escape the sins of their past they've done nothing but escape the sins of their proud does anyone go on to jail they've paid more than a token civil fine robert preston mainstream blowhard know they haven't what about some deterrent for committing a crime. well speaking of sins and escaping the sins of your past the same story the same stick is going on here in the city of london right here behind us on the
headline here on the independent bad bankers war and repent or go to jail right back right that might never happen repent or go to jail this is the mainstream media is trying to play catchup now because they realize that the horrible job they haven't done any significant reporting on how this cold war of financial destruction and mutual destruction has been taken place now they have these bogus headlines that they're going to repent or go to jail and it's a little bit too little too late well let me explain what's going on in this headline max britain stop financial policeman promises criminal prosecutions and every dark corner of the city so this is martin we spoke this week he's now heading the financial conduct authority so frigging british conduct authority he raised the prospect of u.s. style prosecutions of senior executives in the future we want individuals held to account what about now i mean why bore rigging was
a grant of global cartel there are thousands and thousands of e-mails of them conspiring to rig markets thousands of e-mails of them bragging how much they stole how much how easy it was to take this money and here they say we want these u.s. stuff prosecution just a new guy to come along and administrators new paragraph making rattling the cages and such most time martin wheatley will be replaced by some new bureaucrat and he will have been kicked upstairs and work for the very regulator that is supposed to be overseeing and i get a nice fat paycheck because he's a scam artist well in fact speaking of artist max on this final note here we did get a video communique from the artist taxi driver regarding this story bad bankers weren't repent or go to jail. possibly in the future not. knowing. i think. straight i didn't
break you know not go and someone might say gary i know and i know it but i didn't exactly. get. what justice is some get it done like that all right then i don't. funnels. that guy talk perfect sense all right stacy never thanks much panic has a report thank you kelly much more coming why stay right there.
kaiser welcome back to that kaiser report's time now to go to new york talk with kaiser report favorite dr michael hudson dr height in this latest book is the bubble and beyond fictitious capital debt deflation global crisis dr michael hudson welcome to the kaiser report thanks very much max all right now i want to get into some late breaking news here sheila bair tim geithner tim geithner is suddenly emerging as the bogeyman is he rightly said sheila bair is in the mix talk to talk to tell us what's going on here she look there is much more angry in this book than she was under famous exit interview with the new york times magazine that she gave when she left she said that. in the first place she won't close down citibank and that geithner refused to do it and that when they looked at citibank as the f.b.i. say that surance corporation they couldn't just untangle the bank instead it corke
with all of that mortgage activity does it strike you know the activities and sheila bair describes in detail the meeting they had at the white house when she said look. the treasury secretary came in said we're going to force j.p. morgan chase all the other banks to take twenty five billion dollars loan h.-p. this huge gigantic bailout and she said it was all the same. send it back to the entire power that they sent in saving the banking system wasn't against saving the banking system at all it was to save citibank alone because it had been involved so early criminalized and sheila bair came to the alternate banking group of occupy wall street two weeks ago i was there and she said the problem with the financial system is it's been taken over by the mafia and that is the the wall street mafia
essentially it's been criminalized and they've taken over the government to such a degree that when she tried to enforce a law she couldn't do it they've put in a attorney general holder who refuses to prosecute campaign contributors refuses to prosecute wall street and i just got back from the eleventh both the in meeting and the city and also the american military institute meeting in chicago everybody is talking about now the rumors are all out about tim geithner's role in all of this when the obama administration took over planned to leave its role as head of the new york federal research where the sticker advised of bass give away of wealth to wall street a public expense his plan was to follow oh robert rubin to citibank can become the hit for a salary of about twenty million dollars a year but the bank has got together and said tim you know we need you interest
rate we need a very sophisticated slowly crook like you to bail us out and to give us true billions and billions of dollars trillions of dollars you're the only guy who can do it stay in when the secretary of the pressure is when you step down but the japanese call sent from heaven we'll take harry and then you'll get the big payoff you'll be a big millionaire you'll be a player just do the looting for us that are in. side of me and i will do it geithner said there is one thing that i want you have to make sure that it wasn't for ernest out i don't want to run i want complete control so there is no law enforcement there's no intake crime in portsmouth there's no one thing if we're going to steal we have to do it right i'm paraphrasing the discussion. it's almost like the old hollywood movies of the 1930's you know and the mafia would come to.
that but no one of their guys is just the attorney so that he wouldn't prosecute them ever since alan greenspan was put at it center they put it the regulator in church it wouldn't prosecute that day let me jump in for a second to mention alan greenspan and of course he got rid of brooksley born over to see you have to see now you're saying that sheila barrett f.d.i.c she was basically forced to walk the plank and geiger is behind it all the mac to value and master and the result is a crime to genic a criminal enterprise and watch geithner he leaves where he goes well of course he's going to go to wall street somewhere to make a killing on all of his contacts the insider trading but the economic theory that is used to justify this crime spree comes under two had ngs there's the trickle down economics there's milton friedman monetarism or there's keynesian deficit spending and but they've tried both of those you've got record deficit spending and
record monetary stimulus but the economy is still contracting why is that is just because the criminals of completely taken over and we should look at any economic theory any more dr michael hudson because it's not about economics anymore it's about rape and pillage well you're quite right max this is what makes the wall street financial oligarchy different from the mobsters in the one nine hundred thirty s. movie wall street does something that the mug can do they pay. you know over the educational system and the government statistical system to keep picked what they're doing as wealth creation and the deficit that you just mentioned hasn't been the kind of deficit that you had in the one nine hundred thirty s. or that in after world war two there are not deficits of government spending in the real economy to employ labor to build roads to build infrastructure or even to build armaments these deficits are very different these deficits are money dropped
from the helicopter on wall street they call the head of the federal reserve ben bernanke the cutter ben bernanke he because he said i'm going to drop money on the economy but ben bernanke his helicopter only flies over wall street it doesn't over the rest of the economy it only go up bunning on wall street and on the banks the big guys at the bondholders know what sheila bair said when it comes down to it people talk about bailing out the economy but she said if all about the bondholders and the book is sort of an exposé in this and again this is written by a conservative midwestern republican not by a radical and to the of old fashioned republicans to that don't exist in the republican party anymore that are coming out with righteous indignation saying what's happening is wrong it's predatory and the system cannot be fixed without sending a whole lot of people to jail i mean let me ask you this question about ben bernanke
and he came out with his quantitative easing to infinity they're going to buy mortgage backed securities billions of dollars every month for ever dr michael hudson why can't he just retire the mortgages themselves be retired the mortgages that would help the mortgage over his the homeowners but that's not his constituency he wants to essential it pump money into the banks by take it by taking twenty nine trillion dollars it's worth a chump. mortgages on to the government spent on chase giving in exchange. bank. commercial bank deposits at the fed and government ious and then he takes these having what these at at face value hundred percent back to you instead of ten percent value he then sells them at a very very low price at ten cents on the dollar and the banks that have already got one hundred percent value for these mortgages can buy it back from the
government at ten cents on the dollar and make another twenty nine trillion dollars let me ask you a question you wrote in your latest piece so instead of financing it is the u.s. banks don't lend against what may be produced in the future they make loans against collateral already in place including entire companies they wrote a long piece of excellent piece talking about the financialization of the global markets this seems to be the nettle of that piece right here this question of collateral and you're contrasting today's environment with the old days where collateral actually meant something but talk a little bit about that well that's what makes the bubble economy different from what's described in the textbooks if you look at the textbooks that students are taught you have a picture of a factory with smokestacks and workers with lunch pails walking in and out of the factory produce the same goods and services the workers spot but that's not what banks make loans for they don't make loans to build factories or to build anything then it won't only against collateral that's already in place real estate that's
already there or oil and gas reserves or the end of corporate raiders to take over a company that's in place and the corporate raider doesn't build up the company and hire more labor with lunch pails get their sizes the labor at cuts costs grabs the pension funds and says we're going to go bankrupt if you don't renegotiate your actions from defined benefit or you know what you're going to be getting to define contribution plans for all you know is what you pay in ok let me do a bit renegotiate or we're going. to go bankrupt and wipe out your pension altogether so you know. i mean part of a predatory and shrinking process let me let me jump in for a second because the comment was made this week from a private equity investor saying we can get money from the banks to buy companies but we can't get loans from the bank to service the companies that we bought in other words the companies that they bought are our companies that need money to continue in operations they can't get those loans but to your point they can't they
can't get loans to take over companies using the assets of the acquired company as the collateral that's kind of what you're saying right yes the bank credit is only available for a loading it's not available to maintain industry it's part of the neoliberal plan that was brought in by reagan and thatcher in the 1980's credits available only for extracting money from the economy quickly only for emptying out the economy and shrinking it until the united states ends up looking like greece or ireland or or iceland so as soon as the election's over we're going to see the result of just an internal economic collapse everybody's bailing out all right now finally you see that in europe we are seeing an oligarch to counter revolution against democracy explain that. angela merkel explained last year that when the greeks are going to have a referendum on do they want to have those austerity to pay taxes
to pay the bankers she said the problem with austerity is they're going to vote against bailing out the bakers we cannot afford democracy so she said we have to put in a technocrat a technocrat is a euphemism for a bank lobbyist like tim geithner is it a technocrat. and so they said we're going we have the european central bank are going to point a technocratic ruler what the romans called a proconsul to act on behalf of the banks you cannot vote that's what central bank independence is the government policy in your country and greece and spain and portugal is going to be controlled by the bankers the bankers are independent of the political process and the european central bank are telling them what to do by what's gold can do too nowadays in other words we set the conditions on which we will be willing to bail out your banks so that your bank can pay us who've all want
money to them so we will lay down the can do it for you to us and that the greeks say wait a minute we don't want to pay you we want the economy to run for ourselves and the europeans are saying that's the microstate you can't have it anymore that era is over. all right dr michael that's of the godfather of the condiments thank so much for being on the kaiser report thank you very much next going to do it for this edition of the kaiser report with me max kaiser and stacey herbert my guest dr michael it's a but i mean please do so at kaiser report r t t v dot are you the next time. my parents really truly honestly believe that what had happened was as a result of my father's exposure to agent orange i was born with multiple problems
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